All Else Constant, a Bond Will Sell at _____ When

question 10

Multiple Choice

All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate.

• A) a premium; higher than
• B) a premium; equal to
• C) at par; higher than
• D) a discount; higher than

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the amount of the good that consumers are willing to purchase at that price.

Deadweight Loss

The reduction in economic efficiency that happens when equilibrium is not reached or is unattainable for a specific good or service.

Import Tariff

A tax imposed by a government on goods and services imported into its country to protect domestic industries from foreign competition.

Supply and Demand

Economic model of price determination in a market, showing the relationship between the quantity of goods that producers wish to sell at various prices and the quantity consumers wish to buy.